The Federal Council wants to join the Hague Convention on Choice of Court Agreements. This regulates the jurisdiction of courts in international commercial disputes and the cross-border recognition of judgments. In doing so, the Federal Council wants to create legal certainty and strengthen Switzerland as a business location. At its meeting on March 30, 2022, it opened the consultation process on the corresponding federal decree. Accession would also facilitate the enforcement of British judgments in Switzerland, which has become a little more complicated following Brexit.
The Hague Convention on Choice of Court Agreements governs the international jurisdiction of courts in civil and commercial matters as well as the cross-border recognition and enforcement of judgments. The scope of application is limited to commercial disputes and concerns only disputes in which the parties have agreed in advance on the jurisdiction of a specific court (exclusive choice of court agreement).
The agreement contains the following three basic rules:
- The court of a Contracting State designated in an exclusive choice of court agreement must accept jurisdiction (Art. 5).
- A court of a contracting state which is not the state of the agreed court shall stay proceedings to which an exclusive choice of court agreement applies or dismiss the action as inadmissible (Art. 6).
- A decision of a court of a Contracting State designated in an exclusive choice of court agreement is recognized and enforced in the other Contracting States (Art. 10).
The Convention is currently in force in the EU, Mexico, Singapore, Montenegro and the United Kingdom. Now Switzerland is also considering joining. At its meeting on March 30, 2022, the Federal Council opened the consultation on the corresponding federal decree. This will last until July 7, 2022.
Accession to the Hague Jurisdiction on Choice of Court Agreements makes cross-border legal disputes more predictable and is therefore of great interest for Switzerland as a business location. In addition, the Convention is of interest to states that, like Switzerland, position themselves internationally as a place of jurisdiction. This is important not least against the background of the ongoing efforts to establish international commercial courts.
Furthermore, accession would also mitigate the uncertainties in British-Swiss legal relations that have arisen as a result of Brexit. However, due to the transitional provisions of the Hague Convention on Jurisdiction (Art. 16), this measure will only improve the enforcement of Swiss judgments in the UK for those contracts that were concluded after the Convention came into force for Switzerland. Swiss companies can avoid this problem by renewing their contracts with their UK counterparts.
